Senior associate solicitor Gemma Stephenson, in our Commercial Property team, discusses whether Rishi Sunak's recent announcement will have an impact on the Minimum Energy Efficiency (MEES) Regulations.
The Prime Minister has recently announced that the Government is pushing back the deadlines on some of its green commitments. This includes the revision of the timings of the policies relating to the ban of gas boilers and petrol cars. Whilst there are reports that ‘rules forcing landlords to upgrade energy efficiency will be scrapped’, the Government are yet to set out precisely what that means going forwards. Some reports also mention ‘homes’ which could mean there may be a difference in treatment for commercial and residential properties.
Since 1 April 2023 it has been unlawful for landlords of commercial property to grant a new lease of, or continue to let property, where the Energy Performance Certificate (EPC) rating is below an ‘E’ without carrying out improvements and/or registering an exemption.
It was previously believed that 1 April 2027 would be the next target date for increasing the minimum energy efficiency rating requirement for the purposes of MEES to a C, followed by a further target of an increase to a minimum B rating from 1 April 2030.
A large majority of commercial properties are below a B rating and the age and construction of many commercial properties may make it impossible to achieve a B rating. Due to this wide-ranging impact, the removal of the proposed targets, or even pushing them further down the line is likely to be a relief for commercial landlords.
However, there is currently no guarantee that these proposed targets will be delayed for commercial landlords and even if they are, they may be re-introduced in the future. Our advice to commercial landlords would be to continue considering their portfolios and taking action where possible. This will spread out work and costs should any proposed targets remain, or be moved back or re-introduced at a later date.
As to the proposal that a valid EPC will need to be in place for let commercial property at all times from as early as 2025, it remains to be seen if this will still be the case. As the current MEES Regulations only apply to a property where there is a valid EPC in place, many landlords have relied on the grey area as to whether an EPC is required on the renewal of a lease to avoid triggering the MEES Regulations where an EPC would have a low rating. This is particularly the case where the previous EPC has expired and there is a concern that the property may fall below the current MEES requirement of an E.
For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.
